It's Yahoo!'s Turn to Talk

The high-profile "100 days" that Yahoo! ( YHOO) has set aside to find a strategy are almost up. But investors aren't any closer to understanding how the company hopes to turn around its difficult situation.

The Internet giant will announce third-quarter earnings after the market close on Tuesday, just nine days before the end of the 100-day review of the company's strategy that CEO Jerry Yang announced in July.

And because Yang famously said there would be "no sacred cows" as Yahoo! strove to rectify its struggling position, investors will rightly be looking for some bold moves as part of a new vision. While the company's financial results will obviously be closely watched, its plans for a new strategy will be the centerpiece of its report.

For the quarter, analysts surveyed by Thomson Financial expect Yahoo! to earn 8 cents a share on revenue of $1.24 billion.

But given the way Yahoo! shares have traded, Wall Street isn't expecting the company to blow by those numbers. Shares have edged up almost 9% over the quarter, but that comes amid strength in the Internet sector -- and Yahoo! remains the worst performer among big-cap Internet stocks.

Google ( GOOG), eBay ( EBAY) and Amazon ( AMZN) all have made stronger gains over the same period.

Yahoo! faced a number of headwinds over the quarter that could dampen its results and outlook, Deutsche Bank analyst Jeetil Patel wrote in a note to clients last week. For starters, traffic declined 9% year over year during the third quarter, accelerating the 5% drop the company had seen in the second quarter and in contrast to the 9% gain it had made during the first quarter. "Note that weakness in page views inevitably implies weakness in ad impressions for Yahoo!," Patel wrote. Deutsche Bank makes a market in Yahoo! shares.

In addition, search-volume growth has been slowing, and partners like AT&T ( T) may seek to renegotiate deals on more favorable terms, Patel pointed out.

But Yahoo!'s troubles are well known, which means that investors could put more weight on the company's plan to turn things around than on past performance. What's more, Yahoo!'s management has kept its intentions largely under wraps -- Yang said he would shun media appearances while he conducted the review, for example -- so any concrete announcement of direction would be even more significant.

Still, there have been some revealing moves made by the company over the quarter. In September, Yahoo! acquired online ad network Blue Lithium for $300 million. The move marks Yahoo!'s push toward a more "open" platform, where the company sells ad space not only on its own marquee pages but across other Internet properties as well. It will also allow the company to further exploit rapidly emerging behavioral targeting technologies, which take into account user profiles in displaying ads and therefore command higher rates.

If deals like Blue Lithium are a sign of things to come, Yahoo! shareholders should be heartened. The company is often criticized for its sprawling set of services and for trying to be all things to all people. But a move into selling a broader range of advertising while targeting ads more precisely would allow Yahoo! to take advantage of its massive audience while giving its formidable ad sales force a more focused group of products to sell.

On the other hand, another notable deal hints that Yahoo!'s tendency to sprawl remains unchecked. In September, Yahoo! bought email start-up Zimbra for $350 million. While the move will allow it to build further on its successful email service, it will also thrust Yahoo! from the consumer to the business arena, where it will compete directly against Microsoft ( MSFT) and Google. Not only are those competitors bigger, but they've also been major players in that arena for a longer.

Reading the tea leaves, it looks like Yahoo! faces another soft quarter financially. And for each step forward the company takes, it also takes one backward. But then investors knew that 100 days ago.